The state-owned Small and Medium Enterprise Development Bank of Thailand (SME Bank) is expediting legal executions and the investigation process against 50 former and current employees along with outsiders who were allegedly involved in past imprudent lending, leading to hefty bank damages.
Six lawsuits were filed by the bank against 19 people, chairwoman Salinee Wangtal said, adding that the Labour Court recently ruled four former staffers gave favours or benefits to borrowers, causing the bank damage.
SME Bank's former managing directors and other high-ranking officials are among those whom the bank has taken legal action against.
The bank is one of two ailing specialised financial institutions required by the State Enterprises Policy Commission or superboard to rehabilitate their business in order to address long-term problems, with the other being the Islamic Bank of Thailand.
SME Bank has been saddled with hefty bad loans in recent years due to imprudent lending, especially to government projects. Its bad loans stood at 31.9 billion baht or 37.6% of loans outstanding as of Dec 31.
Mrs Salinee said SME Bank also set up a fact-finding panel to inspect 32 persons who had been alleged of involvement in 19 cases of wrongdoing, of which six were loan extensions, two were joint investment, four were breaking bank policies and the rest violating bank rules.
To be transparent and speed up the investigations, the bank has invited representatives from other state agencies including the Department of Special Investigation, the Office of the Attorney-General and the Judge Advocate-General's Department to take part.
Mrs Salinee said a former managing director stood accused of imprudent lending to some companies that sought cheap loans at 5% annual interest in order to slow lay-offs in 2009.
Some 3-4 billion baht worth of non-performing loans (NPLs) were incurred from lending to corporations that borrowed 50-200 million baht each under the Thai Khem Khaeng scheme.
The bank plans to put 10 billion baht worth of bad loans backed by collateral and borrowers no longer running their business under the hammer in several lots, as the first auction took place late last year.
The bank will also open auctions for a 1.4-billion-baht portfolio of leasing including taxis under the Ua-arthorn project. Interested investors can submit bids on Feb 10.
For unsecured retail loans worth 5 billion baht, SME Bank hired a subsidiary of Srisawad Power to collect the loans for a fee of 15% of the recoverable loan.
Mrs Salinee said SME Bank planned to restructure 16 billion baht in NPLs for borrowers still operating their business due to their expected recovery.